When you talk about cost-effective strategies for property managers and owners, tenant retention should be at the top of your list. If you keep your tenants happy, you'll keep receiving those uninterrupted rent checks in the mail (avoiding the time and expense of turnover). Today, we'll summarize the RentJuice whitepaper that details the ins and outs of tenant retention. You can download the full whitepaper for free from the rental experts at RentJuice.

What's the Big Deal

Tenant retention can improve your business by:

• Saving time and money. Each occupied unit means a regular stream of rent payments to your account, as well as less money and time spent on marketing and turnover maintenance.
• Increasing profit. According to RentJuice, "The Journal of Property Management revealed that on average, a retained resident is worth almost $900 each year on top of rent payments. Each time a resident moves out, a unit is vacant for an average of 1.5 months. If the tenant retains their lease, the property saves $1,350 as well as the additional costs that would go to marketing the vacancy."

LTV and CAC

Let's define two of the most important terms related to the economics of tenant retention – LTV and CAC. Then, we'll look at what they mean when combined.

• LTV: Lifetime Value of a Tenant. The LTV is the profit you'll make over the course of the entire time a tenant will be renting with you. The most important thing to understand about LTV is that it increases with each month a tenant stays with you.